A glitch in its supply chain can cost an organisation up to 10% of its shareholder value, and even put the company out of business, warns international supply chain risk management specialist, Gregory Schlegel. “Never before has there been such exponential growth of supply chain complexity, uncertainty and risk as we are seeing today,” he stresses. “With globalisation expanding at a remarkable rate, supply chains have moved into areas where they have never operated. Research shows that if a business is not prepared, even a single small to medium supply chain disruption can cost it as much as R6 million. Most companies across the globe are experiencing an average of seven to 10 supply chain risk events a year – from port congestion to poor supplier performance and changing weather patterns. This equates to an annual cost of R60 million.” Schlegel says that 25% of companies that experience a moderate to severe supply chain disruption go out of business around 18 months after the event. “It is a sobering thought, and not a statistic that we ever read about because few companies or brands want to advertise the fact that they were ruined because they were not prepared,” he says.
